The S&P 500 (SPX) has erased its morning gains after the Bureau of Economic Analysis announced that the U.S. trade deficit widened by 32.5% to -$78.3 billion in July, missing the expectation for -$70.2 billion and growing from -$59.1 billion in June.
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During the month, exports grew by $0.8 billion to $280.3 billion, while imports grew by $20 billion to $358.8 billion. On a year-to-date basis, the trade deficit has increased by 30.9% from the same period in 2024. The latest data could pose an issue for third-quarter GDP because imports are subtracted from the calculation.
Trump Appeals Tariff Case to Supreme Court
After a federal court ruled that President Trump’s tariffs overstepped his legal authority, the case has now been elevated to the Supreme Court. Trump has requested an expedited hearing, with opening arguments starting as early as November, according to Bloomberg. “If you take away tariffs, we could end up being a third-world country,” warned Trump.
If the Supreme Court upholds the decision, the U.S. could be on the hook for refunding tens of billions of dollars in tariff revenue while the average U.S. tariff rate of 16.3% could be halved, said Bloomberg Economics analyst Chris Kennedy.
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